Higher alcohol taxes curb binge drinking, according to a new paper by Boston University scholars.
In their analysis of survey results, they found that a one-percent increase in alcohol beverage prices from taxes was associated with a 1.4 percent decrease in the proportion of adults who binge drink. The state with the highest beer combined taxes - Tennessee - had the lowest binge drinking rate (6.6 percent) in 2010, while states with low alcohol taxes, such as Montana, Wisconsin and Delaware, had relatively high binge drinking rates.
Most previous studies have examined the effect of taxes on average consumption, while the effect of taxes on high-level drinking has been controversial. This makes sense. The more a product is taxed, the fewer people can afford to buy it. By making sure only the rich can afford to binge-drink, the government-funded health burden of alcohol-related deaths should drop. Tennessee has a much lower standard of living compared to Montana, for example, where the oil business has been one of the few things in the moribund American economy still functioning.
And surveys don't ask if people would stop drinking if taxes went up, some people just did and the difference was attributed to differences in taxes. Binge drinking was defined as consuming five or more drinks for men, or four or more drinks for women, per occasion. The percentage of adults who reported binge drinking in U.S. states was based on data from the Behavioral Risk Factor Surveillance System surveys from 2000-2010.
"This is really significant for public health," said lead author Ziming Xuan, assistant professor of community health sciences at Boston University School of Public Health, who says that binge drinking causes more than half of nearly 90,000 alcohol-attributable deaths in the U.S. each year, and accounts for up to 75 percent of the estimated $224 billion in annual economic costs. The study shows that as combined alcohol taxes rise, binge drinking rates fall.
They attributed 20 percent of the difference in binge drinking prevalence rates across U.S. states to differences in taxes.
They also believe that the alternative measure that combines both volume-based and value-based taxes on alcohol was associated with a stronger preventive effect on binge drinking and produced more precise statistical results, compared to the conventional use of only volume-based excise taxes. Using this alternative measure, taxes had about twice the impact on binge drinking, compared to using only excise taxes.
Xuan and co-author Dr. Timothy Naimi, associate professor of the Boston University Schools of Medicine and Public Health and senior author of the study, believes many previous U.S. studies might be underestimating the effect of higher taxes on reducing alcohol consumption. They believe their study demonstrates a key vulnerability of volume-based taxes: their erosion over time due to inflation. Such taxes are levied as a fixed dollar amount per unit volume, rather than as a percentage of price.
"This study emphasizes the importance of assessing multiple co-existing tax types -- and possibly tax structure -- for characterizing the relationship between tax and related outcomes, evaluating the effects of tax policy interventions, and for planning tax policy interventions," the researchers say.
Published in the journal Addiction. The study was supported by a grant from the National Institutes of Health. Researchers from the Department of Economics and Institute for Health Research and Policy, University of Illinois, and the Division of Epidemiology and Community Health, University of Minnesota School of Public Health contributed to the study.
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